The European Commission intends to present a legislative proposal on the digital euro "by the first half of 2023" and then start negotiations with "the European Parliament and the Member States". This was announced by the Vice President of the European Commission Valdis Dombrovskis in his speech at the joint conference with the ECB on the digital euro. “European societies and economies are rapidly digitizing, we must embrace the digital age,” Dombrovskis highlighted.
Our monetary system must also adapt to a digitized future.
Valdis Dombrovskis
Digital euro, the path of a practically new currency
There is clear demand for digital payments in Europe, which has further increased during the pandemic. According to ECB estimates, non-cash payments made in the euro area in 2021 grew by 12,5%, reaching 114 billion transactions, for a total value of 197.000 billion euros. Card payments represent nearly half of these transactions. Cash is still very important in people's lives, but its use is decreasing in many parts of the world (except Japan).
The privacy guarantees?
Dombrovsks stressed that privacy is a fundamental human right that Europeans are committed to defending. You then added that data protection features will not compromise the integrity of the financial system, which must be safeguarded from the risks of terrorist financing and money laundering.
The digital euro must be intuitive, easy to understand and with the possibility of using the currency both online and offline. Dombrovskis tries to reassure: “To be clear, cash will not disappear.” Instead, Member States will focus on expanding positive influence by promoting digital skills and financial literacy, as well as broadband coverage.
A digital euro would complement cash and help make transactions faster and more convenient, but the introduction of an 'electronic' euro also raises obvious issues on freedom of use, expendability and simple "possession" of an asset which, in fact, has now dematerialized.
